[Federal Register Volume 81, Number 98 (Friday, May 20, 2016)]
[Proposed Rules]
[Pages 31868-31873]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-11914]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 81, No. 98 / Friday, May 20, 2016 / Proposed
Rules
[[Page 31868]]
FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL
12 CFR Part 1102
[Docket No. AS16-06]
Appraisal Subcommittee; Notice of Proposed Rulemaking To
Implement Collection and Transmission of Annual AMC Registry Fees
AGENCY: Appraisal Subcommittee of the Federal Financial Institutions
Examination Council.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Appraisal Subcommittee of the Federal Financial
Institutions Examination Council (ASC) is proposing a rule pursuant to
authority granted in the Dodd-Frank Wall Street Reform and Consumer
Protection Act (Dodd-Frank Act) to implement collection and
transmission of appraisal management company (AMC) annual registry fees
by State appraiser certifying and licensing agencies that elect to
register and supervise AMCs. The ASC requests comment on all aspects of
this Notice.
DATES: Comments must be received on or before July 19, 2016.
ADDRESSES: Commenters are encouraged to submit comments by the Federal
eRulemaking Portal or email, if possible. You may submit comments,
identified by Docket Number AS16-06, by any of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments. Click on the ``Help''
tab on the Regulations.gov home page to get information on using
Regulations.gov, including instructions for submitting public comments.
Email: [email protected]. Include the docket number in the
subject line of the message.
Fax: (202) 289-4101. Include docket number on fax cover
sheet.
Mail: Address to Appraisal Subcommittee, Attn: Lori
Schuster, Management and Program Analyst, 1401 H Street NW., Suite 760,
Washington, DC 20005.
Hand Delivery/Courier: 1401 H Street NW., Suite 760,
Washington, DC 20005.
In general, the ASC will enter all comments received into the
docket and publish those comments on the Regulations.gov Web site
without change, including any business or personal information that you
provide, such as name and address information, email addresses, or
phone numbers. Comments received, including attachments and other
supporting materials, are part of the public record and subject to
public disclosure. Do not enclose any information in your comment or
supporting materials that you consider confidential or inappropriate
for public disclosure. At the close of the comment period, all public
comments will also be made available on the ASC's Web site at https://www.asc.gov (follow link in ``What's New'') as submitted, unless
modified for technical reasons.
You may review comments and other related materials that pertain to
this rulemaking action by any of the following methods:
Viewing Comments Electronically: Go to https://www.regulations.gov. Enter ``Docket ID AS16-06'' in the Search box and
click ``Search.'' Click on the ``Help'' tab on the Regulations.gov home
page to get information on using Regulations.gov, including
instructions for viewing public comments, viewing other supporting and
related materials, and viewing the docket after the close of the
comment period.
Viewing Comments Personally: You may personally inspect
comments at the ASC office, 1401 H Street NW., Suite 760, Washington,
DC 20005. To make an appointment, please call Lori Schuster at (202)
595-7578.
FOR FURTHER INFORMATION CONTACT: James R. Park, Executive Director, at
(202) 595-7575, or Alice M. Ritter, General Counsel, at (202) 595-7577,
Appraisal Subcommittee, 1401 H Street NW., Suite 760, Washington, DC
20005.
SUPPLEMENTARY INFORMATION:
I. Background
Title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989, as amended (Title XI),\1\ established the
ASC.\2\ Title XI's purpose is to ``provide that Federal financial and
public policy interests in real estate related transactions will be
protected by requiring that real estate appraisals utilized in
connection with federally related transactions are performed in
writing, in accordance with uniform standards, by individuals whose
competency has been demonstrated and whose professional conduct will be
subject to effective supervision.'' \3\
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\1\ Public Law 101-73, 103 Stat. 183; 12 U.S.C. 3331-3355.
\2\ The ASC Board is comprised of seven members. Five members
are designated by the heads of the FFIEC agencies (Board of
Governors of the Federal Reserve System (Board), Consumer Financial
Protection Bureau (CFPB), Federal Deposit Insurance Corporation
(FDIC), Office of the Comptroller of the Currency (OCC), and
National Credit Union Administration (NCUA)). The other two members
are designated by the heads of the Department of Housing and Urban
Development (HUD) and the Federal Housing Finance Agency (FHFA).
\3\ Title XI Sec. 1101, 12 U.S.C. 3331.
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On July 21, 2010, the Dodd-Frank Act \4\ was signed into law.
Section 1473 of the Dodd-Frank Act included amendments to Title XI.
Section 1117 of Title XI, Establishment of State appraiser certifying
and licensing agencies, was amended by the Dodd-Frank Act to: (1)
Authorize States,\5\ if they so choose, to register and supervise AMCs;
and (2) allow States to add information about AMCs in their State to
the National Registry of AMCs (AMC Registry). States electing to
register and supervise AMCs under Section 1117 must implement minimum
requirements in accordance with the AMC Rule.\6\
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\4\ Public Law 111-203, 124 Stat. 1376.
\5\ As of January, 2016, the 50 States, the District of
Columbia, and four Territories, which are the Commonwealth of Puerto
Rico, Commonwealth of the Northern Mariana Islands, Guam, and United
States Virgin Islands, had State appraiser certifying and licensing
agencies.
\6\ The Dodd-Frank Act added section 1124 to Title XI, Appraisal
Management Company Minimum Requirements, which required the OCC,
Board, FDIC, NCUA, CFPB, and FHFA to establish, by rule, minimum
requirements for the registration and supervision of AMCs by States
that elect to register and supervise AMCs pursuant to Title XI and
the rules promulgated thereunder. The Agencies issued a final rule
(AMC Rule) with an effective date of August 10, 2015. (80 Federal
Register 32658, June 9, 2015).
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Title XI as amended by the Dodd-Frank Act imposes a statutory
restriction that applies 36 months from the effective date of the AMC
Rule (Implementation Period).\7\ In summary, beginning 36 months from
the effective
[[Page 31869]]
date of the AMC Rule, an AMC, as defined by Title XI, may not provide
services for a Federally related transaction in a State unless the AMC
is registered with a State that has established a registration and
supervision program under Section 1117, or is subject to oversight by a
Federal financial institutions regulatory agency.
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\7\ 12 U.S.C. 3353(f)(1).
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Section 1103 of Title XI, Functions of Appraisal Subcommittee, was
amended by the Dodd-Frank Act to require the ASC to maintain the AMC
Registry of AMCs that are either: (1) Registered with and subject to
supervision by a State that has elected to register and supervise AMCs;
or (2) supervised by a Federal financial institutions regulator
(Federally regulated AMCs). It is anticipated that on or before the
effective date of this rule, the ASC will issue an ASC Bulletin to
States that will address:
1. When the AMC Registry will be open for States; and
2. Reporting requirements (information required to be submitted by
States in order to register AMCs on the AMC Registry).
Only those companies that meet the Federal definition of AMC will be
eligible to be on the AMC Registry.\8\
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\8\ Title XI as amended by the Dodd-Frank Act defines
``appraisal management company'' to mean, in part, an external third
party that oversees a network or panel of more than 15 appraisers
(State certified or licensed) in a State, or 25 or more appraisers
nationally (two or more States) within a given year. (12 U.S.C.
3350(11)). Title XI as amended by the Dodd-Frank Act also allows
States to adopt requirements in addition to those in the AMC Rule.
(12 U.S.C. 3353(b)). For example, States may decide to supervise
entities that provide appraisal management services, but do not meet
the size thresholds of the Title XI definition of AMC. If a State
has a more expansive regulatory framework that covers entities that
provide appraisal management services but do not meet the Title XI
definition of AMC, the State should only submit information
regarding AMCs meeting the Title XI definition to the AMC Registry.
Section 1109 of Title XI, Roster of State certified or licensed
appraisers; authority to collect and transmit fees, was amended by the
Dodd-Frank Act to require States that elect to register and supervise
AMCs to collect: (1) From AMCs that have been in existence for more
than a year an annual registry fee of $25 multiplied by the number of
appraisers working for or contracting with such AMC in such State
during the previous year; and (2) from AMCs that have not been in
existence for more than a year, $25 multiplied by an appropriate number
to be determined by the ASC.\9\ The $25 may be adjusted, up to a
maximum of $50, at the discretion of the ASC, if necessary to carry out
the ASC's Title XI functions.\10\
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\9\ 12 U.S.C. 3338(a)(4)(B).
\10\ Id.
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This proposed rule would set the annual AMC registry fee that
States would collect and transmit to the ASC if they elect to register
and supervise AMCs. This proposed rule sets forth the ASC's
interpretation of the phrase ``working for or contracting with'' as
used in the calculation of annual AMC registry fees.
The ASC recognizes that the time required for notice and comment
rulemaking for AMC registry fees could impede States' ability to
implement the fees within the Implementation Period. However, the
restriction on performance of services for Federally related
transactions applies to AMCs that are not registered with the State or
subject to oversight by a Federal financial institutions regulatory
agency. Therefore, it is the ASC's understanding that the failure of a
State to collect the fees under this rule within the Implementation
Period would not subject otherwise properly registered and supervised
AMCs in that State to the ban on providing services for Federally
related transactions in that State.
II. The Proposed Rule
The ASC is issuing this proposal to implement Section 1109 of Title
XI for collection and transmission of AMC registry fees by those States
electing to register and supervise AMCs.\11\ The proposed rule would
establish the annual AMC registry fee and interpret the phrase
``working for or contracting with'' in accordance with section 1109 as
amended by the Dodd-Frank Act. As with appraisers, an AMC operating in
more than one State that elects to register and supervise AMCs would be
required to pay a registry fee in each State in order to be on the AMC
Registry for each of those States.
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\11\ Id.
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Definitions
AMC Registry. Proposed Sec. 1102.401(a) proposes to define AMC
Registry as the national registry maintained by the ASC of those AMCs
that meet the Federal definition of AMC, as defined in 12 U.S.C.
3350(11), are registered by a State or are Federally regulated, and
have paid the annual AMC registry fee.
AMC Rule. Proposed Sec. 1102.401(b) proposes to define AMC Rule as
the interagency final rule on minimum requirements for AMCs, 12 CFR
34.210-34.216; 12 CFR 225.190-225.196; 12 CFR 323.8-323.14; CFR
1222.20-1222.26 (2015).
ASC. Proposed Sec. 1102.401(c) proposes to define ASC as the
Appraisal Subcommittee of the Federal Financial Institutions
Examination Council established under section 1102 (12 U.S.C. 3310) as
it amended the Federal Financial Institutions Examination Council Act
of 1978 (12 U.S.C. 3301 et seq.) by adding section 1011.
Performance of an appraisal. Proposed Sec. 1102.401(d) proposes to
define performance of an appraisal to mean the appraisal service
requested of an appraiser by the AMC was provided to the AMC.
State. Proposed Sec. 1102.401(e) proposes to define State as any
State, the District of Columbia, the Commonwealth of Puerto Rico, the
Commonwealth of the Northern Mariana Islands, Guam, the United States
Virgin Islands, and American Samoa.
Terms incorporated by reference. Proposed Sec. 1102.401(f) states
that the definitions of: Appraisal management company (AMC); appraisal
management services; appraiser panel; consumer credit; covered
transaction; dwelling; Federally regulated AMC are incorporated from
the AMC Rule by reference because the proposed rule is closely related
to the AMC Rule.
Establishing the Annual AMC Registry Fee
Proposed Sec. 1102.402 would establish the annual AMC registry fee
for States that elect to register and supervise AMCs as follows: (1) In
the case of an AMC that has been in existence for more than a year, $25
multiplied by the number of appraisers who have performed an appraisal
for the AMC on a covered transaction in such State during the previous
year; and (2) in the case of an AMC that has not been in existence for
more than a year, $25 multiplied by the number of appraisers who have
performed an appraisal for the AMC on a covered transaction in such
State since the AMC commenced doing business. Performance of an
appraisal means the appraisal service requested of an appraiser by the
AMC was provided to the AMC.
For AMCs that have been in existence for more than a year, Section
1109 of Title XI provides that the annual AMC registry fee is based on
the number of appraisers ``working for or contracting with'' an AMC in
a State during a 12-month period multiplied by $25, up to a maximum of
$50.\12\ The proposed rule adopts the minimum fee of $25 as set by
statute and interprets the phrase ``working for or contracting with''
to mean those appraisers on an AMC
[[Page 31870]]
appraiser panel that performed an appraisal for the AMC on a covered
transaction \13\ during the previous year in a particular State. The
annual AMC registry fee for AMCs that have not been in existence for
more than a year requires a determination by the ASC of an appropriate
multiplier. The ASC proposes to use the same factors of $25 multiplied
by the number of appraisers that performed an appraisal for the AMC on
a covered transaction, but the fee would be based on the actual period
of time since the AMC commenced doing business rather than 12 months.
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\12\ Title XI Sec. 1109(a)(4)(B), 12 U.S.C. 3338(a)(4)(B).
\13\ Consistent with the AMC Rule, the proposed determination of
performing an appraisal is proposed to be based on ``covered
transactions'' rather than ``Federally related transactions.''
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The ASC considered three options with respect to interpreting the
phrase ``working for or contracting with.'' Under the first option, the
phrase ``working for or contracting with'' would have been interpreted
to include every appraiser on an AMC appraiser panel during the
reporting period \14\ in a particular State. The multiplier in this
option would have included all appraisers on an AMC's appraiser panel
in a particular State, including appraisers accepted by the AMC for
consideration for future appraisal assignments.
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\14\ In the case of AMCs that have been in existence for more
than a year, the reporting period would be 12 months. In the case of
an AMC that has not been in existence for more than a year, the
reporting period would be since the AMC commenced doing business.
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Under the second option, the phrase ``working for or contracting
with'' would have been interpreted to include those appraisers engaged
by the AMC to perform an appraisal on a covered transaction during the
reporting period in a particular State. The time the appraiser would be
considered in the calculation is at the point of engagement to perform
a particular appraisal, regardless of whether the appraisal was fully
performed during the reporting period. The ASC seeks comment in
Question 3 below on whether this interpretation would be preferable for
States to administer over the third option, which is set forth in the
proposed rule.
Under the third option, which is set forth in the proposed rule,
the phrase ``working for or contracting with'' would include appraisers
that performed an appraisal for the AMC on a covered transaction during
the reporting period in a particular State. This option would exclude
appraisers accepted by the AMC for consideration for future appraisal
assignments as well as appraisers who performed appraisals in the past,
but did not perform any appraisals in the reporting period. The AMC
registry fee is not intended to result in duplicate fees for the same
appraisal, even if there are multiple drafts of an appraisal.
Therefore, the AMC registry fee is to be calculated based on an
appraisal one time only.
The ASC believes the third option imposes the minimum fee allowed
under the statutory provisions of section 1109 and therefore imposes
the least burden on AMCs. Based on the ASC's anticipated costs of
overseeing States that elect to register and supervise AMCs, as well as
the ASC's anticipated costs of maintaining the AMC Registry, the ASC
believes the proposed annual AMC registry fee would adequately cover
those costs while supporting other Title XI functions of the ASC as
mandated by Congress, including further development of its grant
programs, particularly for States.
Collection and Transmission of Annual AMC Registry Fees
Proposed Sec. 1102.403 would implement collection and transmission
of annual AMC registry fees for States that elect to register and
supervise AMCs following the statutory scheme set forth in section 1117
and section 1109 as amended by the Dodd-Frank Act. The proposed rule
would require AMC registry fees to be collected and transmitted to the
ASC on an annual basis by States that elect to register and supervise
AMCs. Only those AMCs whose registry fees have been transmitted to the
ASC would be eligible to be on the AMC Registry for the 12-month period
following the payment of the fee.
Under the proposed rule, States would have the flexibility to align
a one-year period with any 12-month period, which may or may not be
based on the calendar year. Just as many States do not use a calendar
year for their existing appraiser credentialing process, the ASC
believes that allowing States to set the 12-month period provides
appropriate flexibility and will help States comply with the collection
and transmission of AMC fees and reduce regulatory burden for State
governments. States may choose to do this as they currently do for
their appraisers, meaning some States have a date certain every year.
Other States use, for example, the appraiser's date of birth (States
could use AMC registration date similarly). The registration cycle
would be left to the individual States to determine, but note that the
statutory requirement in section 1109(a)(4) requires States that elect
to register and supervise AMCs to submit AMC registry fees to the ASC
annually.
According to the AMC Rule, Federally regulated AMCs must report to
the State or States in which they operate that have elected to register
and supervise AMCs the information required to be submitted by the
State pursuant to the ASC's policies, including: (i) Information
regarding the determination of the AMC registry fee; and (ii)
information required by the AMC Rule.\15\
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\15\ According to the AMC Rule, States are not required to
identify Federally regulated AMCs operating in their States; nor are
they responsible for supervising or enforcing a Federally regulated
AMC's compliance with information submission requirements. A State
is also not required to assess whether any licensing issues exist in
that State concerning an owner of a Federally regulated AMC that may
disqualify the AMC from being on the National Registry of AMCs.
Rather, Federally regulated AMCs are subject to oversight by the
Federal financial institutions regulators that supervise the
financial institutions that own and control AMCs. The AMC Rule does
not bar a State from collecting a fee from Federally regulated AMCs
to offset the cost of collecting the AMC registry fee and the
information related to the fee.
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III. Request for Comment
The ASC requests comment on all aspects of this proposed rule,
including specific requests for comment that appear throughout the
Supplementary Information above. In addition, the ASC requests comments
on the following questions:
Question 1. The ASC requests comment on all aspects of the proposed
annual AMC registry fee.
Question 2. The ASC requests comment on the ASC's interpretation of
the phrase ``working for or contracting with.''
Question 3. The ASC requests comment on the second option's
interpretation of the phrase ``working for or contracting with.'' While
the proposal defines ``working for or contracting with'' to include
only those appraisers that performed an appraisal for the AMC during
the reporting period, the second option would define ``working for or
contracting with'' to mean ``the AMC engaged an appraiser to perform an
appraisal, regardless of whether the appraiser completed the appraisal
during the reporting period.'' The ASC is requesting comment on whether
this would be an easier interpretation for the States to administer.
Question 4. The ASC requests comment on all aspects of proposed
collection and transmission of annual AMC registry fees.
Question 5. The ASC requests comment on Federally regulated AMCs
operating in a State that does not elect
[[Page 31871]]
to register and supervise AMCs. Should the ASC collect information and
fees directly from Federally regulated AMCs that wish to appear on the
AMC Registry but operate in States that do not elect to register and
supervise AMCs?
Question 6. What barriers, if any, exist that would make it
difficult for a State to implement the collection and transmission of
AMC registry fees?
Question 7. What costs (both direct in terms of fees and indirect
in terms of administrative costs) would be associated with collection
and transmission of AMC registry fees?
Question 8. What aspects of the proposed rule, if any, would be
challenging for States to implement? To the extent such challenges
would exist, what alternative approaches do commenters suggest that
would make implementation easier, while maintaining consistency with
the statute?
IV. Regulatory Analysis
Paperwork Reduction Act
Certain provisions of the proposed rule contain ``information
collection'' requirements within the meaning of the Paperwork Reduction
Act (PRA) of 1995 (44 U.S.C. 3501 et seq.). Under the PRA, the ASC may
not conduct or sponsor, and, notwithstanding any other provision of
law, a person is not required to respond to, an information collection
unless the information collection displays a valid Office of Management
and Budget (OMB) control number. The information collection
requirements contained in this proposed rule are being submitted to OMB
for review and approval at the proposed rule stage by the ASC pursuant
to section 3506 of the PRA and section 1320.11 of the OMB's
implementing regulations (5 CFR part 1320). The collection of
information requirements in the proposed rule are found in Sec. Sec.
1102.400-1102.403. This information is required to implement section
1473 of the Dodd-Frank Act.
Title of Information Collection: Collection and Transmission of
Annual AMC Registry Fees.
OMB Control Nos.: The ASC will be seeking new control numbers for
these collections.
Frequency of Response: Event generated.
Affected Public: States; businesses or other for-profit and not-
for-profit organizations.
Abstract
State Recordkeeping Requirements
States that elect to register and supervise AMCs would be required
to collect and transmit annual AMC registry fees to the ASC. Section
1102.402 would establish the annual AMC registry fee for States that
elect to register and supervise AMCs as follows: (1) In the case of an
AMC that has been in existence for more than a year, $25 multiplied by
the number of appraisers who have performed an appraisal for the AMC on
a covered transaction in such State during the previous year; and (2)
in the case of an AMC that has not been in existence for more than a
year, $25 multiplied by the number of appraisers who have performed an
appraisal for the AMC on a covered transaction in such State since the
AMC commenced doing business. Performance of an appraisal means the
appraisal service requested of an appraiser by the AMC was provided to
the AMC.
Section 1102.403 would require AMC registry fees to be collected
and transmitted to the ASC on an annual basis by States that elect to
register and supervise AMCs. Only those AMCs whose registry fees have
been transmitted to the ASC would be eligible to be on the AMC Registry
for the 12-month period following the payment of the fee. Section
1102.403 clarifies that States may align a one-year period with any 12-
month period, which may, or may not, be based on the calendar year. The
registration cycle is left to the individual States to determine.
State Reporting Burden
Section 1103 of Title XI, Functions of Appraisal Subcommittee, was
amended by the Dodd-Frank Act to require the ASC to maintain a registry
of AMCs that are either: (1) Registered with and subject to supervision
by a State; or (2) Federally regulated AMCs. It is anticipated that on
or before the effective date of this rule, the ASC will issue an ASC
Bulletin to States that will address:
1. When the AMC Registry will be open for States; and
2. Reporting requirements (information required to be submitted by
States in order to register AMCs on the AMC Registry).
Burden Estimates:
Total Number of Respondents: 500 AMCs, 55 States.
Burden Total: 500 hours.
The ASC has a continuing interest in public opinion regarding the ASC's
collection of information. Comments regarding the questions set forth
below may be sent to the OMB desk officer for the ASC by mail to U.S.
Office of Management and Budget, Office of Information and Regulatory
Affairs, Washington DC 20503, or by the Internet to
[email protected], with copies to the ASC at the address
listed in the ADDRESSES section of this SUPPLEMENTARY INFORMATION.
(a) Whether the collection of information is necessary for the
proper performance of the functions of the agency, including whether
the information shall have practical utility;
(b) The accuracy of the agency's estimate of the burden of the
collection of information;
(c) Ways to enhance the quality, utility, and clarity of the
information to be collected; and
(d) Ways to minimize the burden of the collection on respondents,
including through the use of automated collection techniques or other
forms of information technology.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq.,
generally requires that, in connection with a notice of proposed
rulemaking, an agency prepare and make available for public comment a
regulatory flexibility analysis that describes the impact of the
proposed rule on small entities. However, the regulatory flexibility
analysis otherwise required under the RFA is not required if an agency
certifies that the proposed rule will not have a significant economic
impact on a substantial number of small entities and publishes its
certification and a brief explanatory statement in the Federal Register
together with the proposed rule. Based on its analysis, and for the
reasons stated below, the ASC believes that the proposed rule will not
have a significant economic impact on a substantial number of small
entities.
Section 1109 of Title XI provides that State appraiser certifying
and licensing agencies that elect to register and supervise AMCs shall
collect (1) from AMCs that have been in existence for more than a year,
annual AMC registry fees in the amount of $25 (up to a maximum of $50)
multiplied by the number of appraisers ``working for or contracting
with'' an AMC in a State during the previous year; and (2) from AMCs
that have not been in existence for more than a year, annual AMC
registry fees in the amount of $25 (up to a maximum of $50) multiplied
by an appropriate number to be determined by the ASC.\16\ The purpose
of the statutory fee is to support the ASC's functions under Title XI.
Because the ASC believes the minimum fee required by the statute would
be adequate to support its functions, the proposed rule
[[Page 31872]]
would adopt the minimum fee of $25 as set by statute. The proposed rule
would also interpret the phrase ``working for or contracting with'' to
mean those appraisers that performed an appraisal for the AMC on a
covered transaction during the reporting period. For AMCs that have
existed for more than a year, the formula would be $25 multiplied by
the number of appraisers who have performed an appraisal for the AMC on
a covered transaction during the previous year. For AMCs that have not
existed for more than a year, the $25 fee would be multiplied by the
number of appraisers that performed an appraisal for the AMC on a
covered transaction, since the AMC commenced doing business.
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\16\ 12 U.S.C. 3338(a)(4)(B).
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Regarding the proposed fee for AMCs that have been in existence for
more than a year, the ASC believes the proposed rule would impose the
minimum fee allowed under the statutory provisions of section 1109. The
ASC proposal would not exercise statutory discretion granted to the ASC
to increase the fee above $25. Further, the ASC would interpret
``working for or contracting with'' to mean only those appraisers who
actually performed an appraisal for the AMC, as opposed to all
appraisers on the AMC's panel or all appraisers engaged, regardless of
whether the assignment was performed. The ASC believes this formula
would result in the lowest fee allowed by the statute and the ASC would
be choosing not to exercise its authority to increase this minimum fee.
Therefore, any burden produced is the result of statutory and not
regulatory requirements.
The ASC has also decided to propose the statutory minimum fee of
$25 for AMCs that have not existed for a year. As required by statute,
the ASC is proposing an appropriate number against which to multiply
the $25 fee. The ASC is proposing to use the same multiple as used for
AMCs that have existed for more than a year (i.e., the number of
appraisers that have performed appraisal assignments for the AMC). It
is possible that the ASC may have been able to propose a multiple that
would result in a lower fee and would still be deemed appropriate. In
this regard, the rule may create burden for AMCs that have not existed
for more than a year, beyond the burden created by the statutory
requirements alone.
While some burden beyond the statutory requirements may result from
the rule for AMCs that have not existed for more than a year, the ASC
does not believe the rule will have a significant economic impact on a
substantial number of small entities. There are only approximately 500
AMCs operating in the United States. The annual regulatory burden will
only apply to new AMCs that have not existed for more than a year.
Given the small number of AMCs currently in operation, it is unlikely
that there will be a substantial number of AMCs that commence doing
business in any given year. Further, the ASC is proposing the lowest
possible fee of $25. Therefore, the ASC does not believe that the
exercise of its discretion in setting the fee formula for such AMCs
will have a significant economic impact on a substantial number of
small entities.
The collection and transmission to the ASC of AMC registry fees by
the States would create some recordkeeping, reporting and compliance
requirements. However, these collection and transmission requirements
are imposed by the statute, not the proposed rule. Further, the RFA
requires an agency to perform a regulatory flexibility analysis of
small entity impacts when the agency's rule directly regulates the
small entities.\17\
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\17\ For purposes of assessing the impacts of the proposed rule
on small entities, ``small entities'' is defined in the RFA to
include small businesses, small not-for-profit organizations, and
small government jurisdictions. 5 U.S.C. 601(6). A ``small
business'' is determined by application of SBA regulations and
reference to the North American Industry Classification System
(NAICS) classifications and size standards. 5 U.S.C. 601(3). A
``small organization'' is any ``not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.''
5 U.S.C. 601(4). A ``small governmental jurisdiction'' is the
government of a city, county, town, township, village, school
district, or special district with a population of less than 50,000.
5 U.S.C. 601(5). Given these definitions, States that elect to
establish licensing and certification authorities are not small
entities and the burden on them is not relevant to this analysis.
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Based on its analysis, and for the reasons stated above, the ASC
believes that the proposed rule will not have a significant economic
impact on a substantial number of small entities. Therefore, the ASC
certifies that the proposed rule would not have a significant economic
impact on a substantial number of small entities. Accordingly, an
initial regulatory flexibility analysis is not required. The ASC
requests comment on all aspects of this analysis.
Unfunded Mandates Reform Act of 1995 Determination
The ASC has analyzed the proposed rule under the factors in the
Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1532). Under this
analysis, the ASC considered whether the proposed rule includes a
Federal mandate that may result in the expenditure by State, local, and
tribal governments, in the aggregate, or by the private sector, of $100
million or more in any one year (adjusted annually for inflation). For
the following reasons, the ASC finds that the proposed rule does not
trigger the $100 million UMRA threshold. First, the mandates in the
proposed rule apply only to those States that choose to establish an
AMC registration and supervision system. Second, the costs specifically
related to requirements set forth in statute are excluded from
expenditures under the UMRA. Given that the proposed rule reflects
requirements that arise from section 1473 of the Dodd-Frank Act, the
UMRA cost estimate for the proposed rule is zero. For this reason, and
for the other reasons cited above, the ASC has determined that this
proposed rule will not result in expenditures by State, local, and
tribal governments, or the private sector, of $100 million or more in
any one year. Accordingly, this proposed rule is not subject to section
202 of the UMRA.
List of Subjects in 12 CFR Part 1102
Administrative practice and procedure, Appraisers, Banks, Banking,
Freedom of information, Mortgages, Reporting and recordkeeping
requirements.
Authority and Issuance
For the reasons set forth in the preamble, the ASC proposes to
amend 12 CFR part 1102 as follows:
PART 1102--APPRAISER REGULATION
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1. The authority citation for part 1102 is revised to read as follows:
Authority: 12 U.S.C. 3348(a), 3332, 3335, 3338 (a)(4)(B),
3348(c), 5 U.S.C. 552a, 553(e); Executive Order 12600, 52 FR 23781
(3 CFR, 1987 Comp., p. 235).
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2. Subpart E to part 1102 is added to read as follows:
Subpart E--Collection and Transmission of Appraisal Management
Company (AMC)
Registry Fees
Sec.
1102.400 Authority, purpose, and scope.
1102.401 Definitions.
1102.402 Establishing the Annual AMC Registry Fee.
1102.403 Collection and Transmission of Annual AMC Registry Fees.
Sec. 1102.400 Authority, purpose, and scope.
(a) Authority. This subpart is issued by the Appraisal Subcommittee
(ASC) under sections 1106 and 1109 (a)(4)(B) of Title XI of the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989
(Title XI), as amended by the
[[Page 31873]]
Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank
Act) (Pub. L. 111-203, 124 Stat. 1376 (2010)), 12 U.S.C. 3335, 3338
(a)(4)(B)).
(b) Purpose. The purpose of this subpart is to implement section
1109 (a)(4)(B) of Title XI, 12 U.S.C. 3338.
(c) Scope. This subpart applies to States that elect to register
and supervise appraisal management companies pursuant to 12 U.S.C. 3353
and the regulations promulgated thereunder.
Sec. 1102.401 Definitions.
For purposes of this subpart:
(a) AMC Registry means the national registry maintained by the ASC
of those AMCs that meet the Federal definition of AMC, as defined in 12
U.S.C. 3350(11), are registered by a State or are Federally regulated,
and have paid the annual AMC registry fee.
(b) AMC Rule means the interagency final rule on minimum
requirements for AMCs, 12 CFR 34.210-34.216; 12 CFR 225.190-225.196; 12
CFR 323.8 -323.14; 12 CFR 1222.20-1222.26 (2015).
(c) ASC means the Appraisal Subcommittee of the Federal Financial
Institutions Examination Council established under section 1102 (12
U.S.C. 3310) as it amended the Federal Financial Institutions
Examination Council Act of 1978 (12 U.S.C. 3301 et seq.) by adding
section 1011.
(d) Performance of an appraisal means the appraisal service
requested of an appraiser by the AMC was provided to the AMC.
(e) State means any State, the District of Columbia, the
Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana
Islands, Guam, the United States Virgin Islands, and American Samoa.
(f) Terms incorporated by reference. Definitions of: Appraisal
management company (AMC); appraisal management services; appraisal
panel; consumer credit; covered transaction; dwelling; Federally
regulated AMC are incorporated from the AMC Rule by reference.
Sec. 1102.402 Annual AMC registry fee.
The annual AMC registry fee to be applied by States that elect to
register and supervise AMCs is established as follows:
(a) In the case of an AMC that has been in existence for more than
a year, $25 multiplied by the number of appraisers who have performed
an appraisal for the AMC in connection with a covered transaction in
such State during the previous year; and
(b) In the case of an AMC that has not been in existence for more
than a year, $25 multiplied by the number of appraisers who have
performed an appraisal for the AMC in connection with a covered
transaction in such State since the AMC commenced doing business.
Sec. 1102.403 Collection and transmission of annual AMC registry
fees.
(a) Collection of annual AMC registry fees. States that elect to
register and supervise AMCs pursuant to the AMC Rule shall collect an
annual registry fee as established in Sec. 1102.402 (a) from AMCs
eligible to be on the AMC Registry.
(b) Transmission of annual AMC registry fee. States that elect to
register and supervise AMCs pursuant to the AMC Rule shall transmit AMC
registry fees as established in Sec. 1102.402 (a) to the ASC on an
annual basis. Only those AMCs whose registry fees have been transmitted
to the ASC will be eligible to be on the AMC Registry for the 12-month
period subsequent to payment of the fee.
By the Appraisal Subcommittee.
Dated: May 16, 2016.
James R. Park,
Executive Director.
[FR Doc. 2016-11914 Filed 5-19-16; 8:45 am]
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